Ma Weihua, a highly influential Chinese banker and chief executive of Merchants Bank, China's sixth-largest lender by assets, said the bank would also relax approvals on loans for domestic small and medium-sized enterprises (SME) next year.

SMEs have become the support pillar of China's GDP growth. To realize China's goal of boosting domestic consumption and maintaining economic growth, it is now an urgent task to solve financing problems for SMEs, Ma said.

He was speaking to a group of leading Chinese private entrepreneurs in Shanghai, including Li Shufu, chairman of Zhejiang Geely Holding Group, which is finalising a deal to take over Ford Motor's (F.N) Volvo Car Corp.

In 2010, Merchants Bank, headquartered in the southern Chinese city of Shenzhen bordering Hong Kong, would focus on loans of less than 5 million yuan ($732,200) for small businesses and relax approval processes for such lending, said Ma.

He said Merchants Bank had set up an SME Credit Centre, which would have more independent power in approving small loans without the need to report every case to the bank's head office.

In China, big enterprises should support small enterprises, and so should financial institutions, he said.

When financing problems for SMEs are solved and SMEs really feel energetic and flexible about doing business, China's economy can truly get out of the financial crisis, said Ma, a former central banker. 2010 will bring big opportunities to many SMEs.

China's Big Four banks led by Industrial and Commercial Bank of China (601398.SS)(1398.HK), now the world's largest bank by market value, hold a combined 50 percent share of the domestic lending market, mostly for big state-owned enterprises.

SMEs have contributed more than half of China's GDP and foreign investors have shown strong interest in helping Chinese SMEs grow bigger, faster.

In October, a consortium led by U.S. buyout giant Kohlberg Kravis Roberts & Co [KKR.UL] injected a total $160 million into a Chinese financial leasing firm for about a 30 percent stake in the company, which focuses on SMEs. [ID:nSHA21400]

Chinese companies have so far been less affected by the global financial crisis than their Western counterparts, but many SMEs have complained about the difficulty of getting loans from domestic banks, which are concerned about potential credit risks.

Some companies, including Geely, are eyeing Western assets whose values have fallen sharply since the financial crisis, providing a rare opportunity for expansion abroad.

The government also vowed to exercise stricter controls over bank lending next year, guiding credit to new energy projects and consumers, while choking off financing to polluters and sectors riddled with overcapacity. [UD:nTOE5BM03X] (Editing by Chris Lewis) ($1=6.829 Yuan)